Intel Hedges Bets, Gets Cozy With Android

At CES 2013, Intel shows it won't let longstanding partnership with Microsoft stand in the way of growth.

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It seems Intel and Microsoft have always been joined at the hip, like Batman and Robin, Fred and Ginger, or Lindsay and vodka. But with the so-called Wintel monopoly a thing of the past, the partnership is under strain. Microsoft last year broke ranks when it tapped ARM chipmakers for some Windows 8 devices, including Surface RT. Now it's Intel's turn. At CES on Monday, the company left little doubt that it's betting much of its future on Google's Android OS.

"We've worked very closely with Google to create a highly optimized version of Android for our platforms," said Mike Bell, general manager of Intel's mobile and communications group, during a CES presentation. "We even included some Intel-developed technology that lets the majority of Android applications just run, no matter what platform they were created for."

Intel used the annual desert tech fest to announce a new generation of Atom chips that will be aimed at what it sees as a huge, untapped market -- low cost, but fully featured smartphones. Its new Atom Z2420, or "Lexington" platform, is targeted at emerging markets abroad and eventually at value markets in the United States. Bell said demand for such devices could reach 500 million units by 2015. "It's one of the fastest growing segments in the mobile device world," said Bell.

But Bell said buyers in that market won't be satisfied with hand me downs. So Intel designed Lexington to support numerous features, like video, fast graphics and multitasking, that until now have been reserved for pricier phones. To that end, Lexington supports hyper-threading, can hit speeds of up to 1.2 GHz, and supports 1080p HD video, as well as dual cameras.

"The emerging-market customers shouldn't have to settle for a substandard experience. We think that smartphones have become an enabling technology that should be within everyone's reach," said Bell.

Bell showed off Lexington's capabilities by using a 3.5-inch reference phone built on the chip to snap off seven photos in less than a second. "That's pretty much it," said Bell, who launched and concluded the demo before most of the audience realized what was happening. "It has the horsepower you need to drive Android applications in a really fantastic way," said Bell.

Of course, for a phone to pack that kind of horsepower while remaining within the value segment means it can't carry much in the way of additional costs beyond hardware. It can't, for instance, run an OS that requires the manufacturer to pay a fat licensing fee to the developer. That is to say, it can't run Windows Phone.

Even a low-end Windows 8 smartphone like the Nokia Lumia 710 is still going for about $190, unlocked.

Intel wants into the high-volume, value market in which devices could go for less than $100, and that means Android, which held 53.7% of the U.S. smartphone market as of November, compared to just 3% for Microsoft, according to ComScore. Acer, India's Lava and African carrier Safaricom have all committed to building or carrying Android phones based on Lexington when it becomes available later this year, said Bell.

Make no mistake -- Intel isn't about to abandon Microsoft. Windows still represents, by far, the largest OS installed base for Intel chips. And at CES, the company talked up "Haswell," the fourth-generation Core processor that will add more horsepower and new capabilities, such as all-day battery life, to Windows 8 Ultrabooks.

This is merely to say that Intel has finally recognized that if it wants to be a legit player in mobile computing, alongside rivals like Nvidia and Qualcomm, it too must jump on the Android bandwagon, protestations from Microsoft be damned. It took CEO Paul Otellini too long to recognize this, and that may be part of the reason why he is stepping down. But CES 2013 shows that the chipmaker may now be headed in the right direction.

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